Blanchett v Mowbray - [2013] NZHC 2797

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2010-419-1584 [2013] NZHC 2797

UNDER the Companies Act 1993

IN THE MATTER of the liquidation of Hori Limited (in liquidation)

BETWEEN DAVID MURRAY BLANCHETT and
COLIN THOMAS McCLOY as
liquidators of Hori Limited (in liquidation) Applicants

ANDSTEPHEN HOPE MOWBRAY and PAREKURA SMITH MOWBRAY Respondents

Hearing: 18 October 2013

Counsel: MD Branch and SJ Rawcliffe for applicants
CB Hirschfeld for respondents

Judgment: 24 October 2013

JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application to set aside transactions]

This judgment was delivered by me on 24 October 2013 at 3pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Harkness Henry, Hamilton
Enterprise Law, Auckland (M Taia)

BLANCHETT v MOWBRAY [2013] NZHC 2797 [24 October 2013]

The application

[1] The applicants apply for judgment against the respondent for $29,362, plus interest and costs.

The grounds relied upon in support

[2] The application is made in reliance on the following:

(a) Notices to set aside voidable transactions were served on the respondents, Parekura Mowbray on 10 May 2013 and Stephen Mowbray on 13 May 2013, in accordance with ss 292 and 294 of the Companies Act 1993;

(b)Neither respondent served a notice of objection on the applicants within the timeframe prescribed by s 294 of the Companies Act 1993. That time expired on 10 June 2013 for Parekura Mowbray and
11 June 2013 for Stephen Mowbray.

[3] The applicants claim that as no notice of objection was served by either respondent the transactions, set out below, were set aside on 11 June 2013.

(a)       Payment of $4,500 on 24 December 2008 (b)   Payment of $4,500 on 20 February 2009 (c)           Payment of $4,500 on 27 March 2009
(d)      Payment of $2,200 on 1 May 2009 (e)      Payment of $1,652 on 2 June 2009 (f)      Payment of $2,170 on 26 June 2009
(g)      Payment of $4,340 on 24 December 2009 (h)   Payment of $5,500 on 4 May 2010

[4] The applicants claim that the respondents are liable to pay the applicants the sum of $29,362, plus interest and costs in accordance with ss 294 and 295(1)(a) and (c) of the Companies Act 1993.

The opposition

[5] The respondents oppose the application and rely on s 296(3) of the Companies Act 1993. They say that they received each of the payments in good faith. They also say that a reasonable person would not suspect and could not have had reasonable grounds for suspecting that Hori Ltd was, or would become, insolvent. They say that they gave value for the payments received, or they have altered their position in the reasonably held belief that the payments to them were valid and would not be set aside.

Evidence admitted by consent

[6] In addition to the affidavits filed, counsel consented to my receiving as evidence the typed document headed Polly and Steve Mowbray to say. Accordingly, I include that document in the evidence to be considered.

Background

[7] In 2007, Jason Shane Paama and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Blanchett v Mowbray

Details

AGLC: Blanchett v Mowbray [2013] NZHC 2797
Case: [2013] NZHC 2797
Decision Date: 24 October 2013

CaseChat Overview and Summary

The applicants, David Murray Blanchett and Colin Thomas McCloy, liquidators of Hori Limited (in liquidation), applied to set aside certain transactions and recover the corresponding funds from the respondents, Stephen Hope Mowbray and Parekura Smith Mowbray. The transactions in question were payments made by Hori Limited to the respondents' bank, totalling $29,362, which were intended to satisfy a loan obligation to the respondents. The respondents did not object to the notices served under the Companies Act 1993, and the applicants sought judgment against them for the amount owed, plus interest and costs. The respondents argued that they had a defence under section 296(3) of the Companies Act 1993, claiming they acted in good faith, did not suspect insolvency, and had either given value for the payments or altered their position in the reasonably held belief that the payments were valid. The court considered the requirements of section 296(3) and concluded that the respondents did not provide evidence of giving value for the payments or altering their position in the reasonably held belief that the payments were valid. Therefore, the court found that the respondents did not have a defence under section 296(3) of the Companies Act 1993. Judgment was entered against the respondents for the amount of $29,362, plus interest from the date of liquidation, and costs were reserved pending agreement between the parties or further direction from the court.

Orders